GAAP net income of $10.0 million, compared to a $0.6 million GAAP net
loss in the same period in 2017, and an 11.6% return on revenue

Non-GAAP net income of $10.0 million, reflecting a 44.1% increase over
non-GAAP net income of $7.0 million in the same period in 2017 (see
accompanying table for reconciliation of GAAP and non-GAAP measures)

Total units sold were 46,100, an increase of 12,100, or 35.6%, over
the same period in 2017

Full Year 2018 Highlights

Record total revenue of $358.1 million, up 43.6% versus 2017

Record sales revenue of $336.0 million, up 49.0% versus 2017

Rental revenue of $22.1 million, down 7.7% versus 2017

GAAP net income of $51.8 million, reflecting a 146.9% increase versus
2017 and a 14.5% return on revenue

Operating income of $37.9 million, representing a 37.3% increase
versus 2017 and a 10.6% return on revenue

Record units sold of 198,600, an increase of 70,600, or 55.2%, versus
2017

446 inside direct-to-consumer sales representatives as of December 31,
2018, an increase of 183, or 69.6%, versus December 31, 2017

“The fourth quarter of 2018 was another investment quarter for us as we
continued to scale our sales infrastructure to drive future revenue
growth. We are executing on our strategic initiatives and remain focused
on increasing global adoption of our best-in-class portable oxygen
concentrators,” said Chief Executive Officer, Scott Wilkinson. “We
believe we will see strong revenue growth in 2019 driven by our prior
investments and by continued patient and provider demand for our
products.”

Fourth Quarter 2018 Financial Results

Total revenue for the three months ended December 31, 2018 rose 35.7% to
$86.5 million from $63.8 million in the same period in 2017.
Direct-to-consumer sales rose 50.4% over the same period in 2017,
primarily due to an increase in the number of sales representatives and
associated consumer advertising. Domestic business-to-business sales
grew 16.0% over the same period in 2017. While domestic
business-to-business sales growth was primarily driven by continued
adoption by traditional home medical equipment providers and internet
resellers, order activity did slow from one national homecare provider
in the fourth quarter of 2018. Excluding this national homecare provider
in the fourth quarter of 2018, domestic business-to-business sales
increased at roughly the average rate of the previous four domestic
business-to-business sales quarters. International business-to-business
sales in the fourth quarter of 2018 increased 54.5% (57.0% on a constant
currency basis) from the comparative period in 2017, primarily due to
robust European demand. Sales in Europe represented 87.8% of
international sales in the fourth quarter of 2018, up from 84.3% in the
fourth quarter of 2017. Rental revenue in the fourth quarter of 2018 was
$5.8 million compared to $5.4 million in the fourth quarter of 2017,
representing growth of 6.7%. Despite declining net patients on service,
this is the first revenue growth quarter for rental revenue since the
fourth quarter of 2015. Rental revenue declined to 6.7% of total revenue
in the fourth quarter of 2018 from 8.5% of total revenue in the fourth
quarter of 2017.

Total gross margin was 50.4% in the fourth quarter of 2018 versus 48.2%
in the comparative period in 2017. Sales gross margin was 51.4% in the
fourth quarter of 2018 versus 50.5% in the fourth quarter of 2017. The
sales gross margin percentage improvement was primarily attributable to
an increased sales mix towards direct-to-consumer sales. The favorable
mix was partially offset by lower average selling prices in both
business-to-business channels due to lower average prices associated
with increased volumes and lower direct-to-consumer pricing effective
June 1, 2018. Rental gross margin was 36.2% in the fourth quarter of
2018 versus 23.2% in the fourth quarter of 2017. The increase in rental
gross margin was primarily due to increased rental revenue per patient
on service and lower depreciation expense.

Total operating expense increased to $38.8 million, or 44.8% of revenue,
in the fourth quarter of 2018 versus $25.6 million, or 40.1% of revenue,
in the fourth quarter of 2017 as the Company continued to make
investments in sales infrastructure and related advertising to support
planned growth.

Operating expense included research and development expense of $1.7
million in the fourth quarter of 2018, which was up from the $1.4
million in the comparative period in 2017, primarily due to increased
personnel-related expenses and product development costs. Sales and
marketing expense increased to $28.3 million in the fourth quarter of
2018 versus $15.2 million in the comparative period in 2017, primarily
due to increased personnel-related expenses due to salesforce additions
and increased advertising expense. General and administrative expense
declined to $8.8 million in the fourth quarter of 2018 versus $9.0
million in the comparative period in 2017, primarily due to reductions
in patent defense costs and lower bad debt expense, which was partially
offset by increased personnel-related expenses.

Operating income for the three months ended December 31, 2018 declined
8.0% to $4.8 million, or 5.5% of revenue, from $5.2 million, or 8.1% of
revenue, in the fourth quarter of 2017, primarily due to significantly
higher sales and marketing expenses.

In the fourth quarter of 2018, the Company reported an income tax
benefit of $4.2 million, compared to an income tax expense of $6.4
million reported in the fourth quarter of 2017. As a reminder, in the
prior year period the Tax Cuts and Jobs Act (“TCJA”) resulted in a $7.6
million non-cash income tax provision expense in the fourth quarter of
2017 associated with the revaluation of the deferred tax asset. Inogen’s
income tax benefit in the fourth quarter of 2018 also included a $6.0
million benefit in provision for income taxes related to excess tax
benefits recognized from stock-based compensation compared to a $3.5
million decrease in the fourth quarter of 2017. Excluding both the
deferred tax asset revaluation expense and the stock-based compensation
benefit, Inogen’s non-GAAP effective tax rate in the fourth quarter of
2018 decreased to 30.6% versus 40.0% in the fourth quarter of 2017,
primarily due to the changes in the federal tax rate associated with the
TCJA. A reconciliation of GAAP and non-GAAP measures is included in the
accompanying tables attached hereto.

In the fourth quarter of 2018, the Company reported GAAP net income of
$10.0 million, compared to a GAAP net loss of $0.6 million in the fourth
quarter of 2017. In the fourth quarter of 2018, the Company reported
non-GAAP net income of $10.0 million, compared to non-GAAP net income of
$7.0 million in the fourth quarter of 2017. Earnings per diluted common
share was $0.44 in the fourth quarter of 2018 versus net loss per
diluted common share of $0.03 in the fourth quarter of 2017.

Cash, cash equivalents, and marketable securities were $240.3 million as
of December 31, 2018 compared to $223.9 million as of September 30,
2018, an increase of $16.5 million in the fourth quarter of 2018.

Financial Outlook for 2019

Inogen is reiterating its full year 2019 total revenue guidance range of
$430 to $440 million, representing growth of 20.1% to 22.9% versus 2018
full year results. The Company still expects direct-to-consumer sales to
be its fastest growing channel, and domestic business-to-business sales
and international business-to-business sales to have a solid growth
rate. The Company continues to see strong demand from traditional HME
providers, but given reduced order activity from one large provider, the
Company expects domestic business-to-business sales to grow modestly in
the first half of 2019, with growth improving in the back half of 2019
as period-over-period revenue comps get easier. Internationally, Inogen
will be primarily focused on the European markets in 2019.

In November 2018, the Financial Accounting Standards Board issued
Accounting Standards Update (ASU) 2018-19, Codification Improvements to
Topic 326, Financial Instruments-Credit Losses, which requires the
rental bad debt expense to be charged to rental revenue instead of
general and administrative expense. The impact of the adoption is
expected to be a headwind to rental revenue for full year 2019. Inogen
expects rental revenue to grow modestly in 2019 compared to 2018,
despite the additional 3.9% decline in portable oxygen concentrator
Medicare reimbursement rates effective January 1, 2019 and the adoption
of ASU 2018-19.

The Company is reducing its full year 2019 GAAP net income guidance
range to $40 to $44 million from $48 to $52 million, compared to 2018
GAAP net income of $51.8 million. This decrease in net income is due to
an estimated decrease in excess tax benefits recognized from stock-based
compensation from $12 million to $4 million, due to the Company’s
current stock price and fewer expected option exercises in 2019.
Excluding the benefit from the $4 million decrease in income tax
provision expected in 2019, the Company still expects a non-GAAP
effective tax rate of approximately 24%. The Company expects its
effective tax rate including stock compensation deductions to vary
quarter-to-quarter depending on the amount of pre-tax net income and on
the timing and size of stock option exercises.

Inogen is reiterating its guidance range for full year 2019 operating
income of $46 to $50 million, representing 21.4% to 32.0% growth
compared to 2018 results and Adjusted EBITDA of $67 to $71 million,
representing 9.3% to 15.9% growth compared to 2018 results.

Inogen also expects net positive cash flow for 2019 with no additional
equity capital required to meet its current operating plan.

Conference Call

Individuals interested in listening to the conference call today at
1:30pm PT/4:30pm ET may do so by dialing (855) 238-8123 for domestic
callers or (412) 317-5217 for international callers. Please reference
Inogen (INGN) to join the call. To listen to a live webcast, please
visit the Investor Relations section of Inogen's website at: http://investor.inogen.com/.

A replay of the call will be available beginning February 26, 2019 at
3:30pm PT/6:30pm ET through 3:30pm PT/6:30pm ET on March 5, 2019. To
access the replay, dial (877) 344-7529 or (412) 317-0088 and reference
Access Code: 10128643. The webcast will also be available on Inogen's
website for one year following the completion of the call.

Inogen has used, and intends to continue to use, its Investor Relations
website, http://investor.inogen.com/,
as a means of disclosing material non-public information and for
complying with its disclosure obligations under Regulation FD. For more
information, visit http://investor.inogen.com/.

About Inogen

Inogen is innovation in oxygen therapy. We are a medical technology
company that develops, manufactures and markets innovative oxygen
concentrators used to deliver supplemental long-term oxygen therapy to
patients suffering from chronic respiratory conditions.

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, among others, statements regarding anticipated growth
opportunities; the anticipated impact of investment in sales
infrastructure; the focus on increasing global adoption; expectations
for all revenue channels for full year 2019, including drivers of
revenue growth; the impact of ASU 2018-19; the expected impact of the
lower decrease in provision for income taxes related to excess tax
benefits recognized from stock-based compensation for full year 2019;
and financial guidance for 2019, including revenue, GAAP net income,
operating income, Adjusted EBITDA, net cash flow, effective tax rates,
and the need for equity financing. Forward-looking statements are
subject to numerous risks and uncertainties that could cause actual
results to differ materially from currently anticipated results,
including but not limited to, risks arising from the possibility that
Inogen will not realize anticipated revenue; the impact of reduced
reimbursement rates; the possible loss of key employees, customers, or
suppliers; and intellectual property risks if Inogen is unable to secure
and maintain patent or other intellectual property protection for the
intellectual property used in its products. In addition, Inogen's
business is subject to numerous additional risks and uncertainties,
including, among others, risks relating to market acceptance of its
products; competition; its sales, marketing and distribution
capabilities; its planned sales, marketing, and research and development
activities; interruptions or delays in the supply of components or
materials for, or manufacturing of, its products; seasonal variations;
unanticipated increases in costs or expenses; and risks associated with
international operations. Information on these and additional risks,
uncertainties, and other information affecting Inogen’s business
operating results are contained in its Quarterly Report on Form 10-Q for
the quarter ended September 30, 2018 and in its other filings with the
Securities and Exchange Commission. Additional information will also be
set forth in Inogen’s Annual Report on Form 10-K for the year ended
December 31, 2018 to be filed with the Securities and Exchange
Commission. These forward-looking statements speak only as of the date
hereof. Inogen disclaims any obligation to update these forward-looking
statements except as may be required by law.

Use of Non-GAAP Financial Measures

Inogen has presented certain financial information in accordance with
U.S. GAAP and also on a non-GAAP basis for the three and twelve months
ended December 31, 2018 and December 31, 2017. Management believes that
non-GAAP financial measures, taken in conjunction with U.S. GAAP
financial measures, provide useful information for both management and
investors by excluding certain non-cash and other expenses that are not
indicative of Inogen's core operating results. Management uses non-GAAP
measures to compare Inogen's performance relative to forecasts and
strategic plans, to benchmark Inogen's performance externally against
competitors, and for certain compensation decisions. Non-GAAP
information is not prepared under a comprehensive set of accounting
rules and should only be used to supplement an understanding of Inogen's
operating results as reported under U.S. GAAP. Inogen encourages
investors to carefully consider its results under U.S. GAAP, as well as
its supplemental non-GAAP information and the reconciliation between
these presentations, to more fully understand its business.
Reconciliations between U.S. GAAP and non-GAAP results are presented in
the accompanying table of this release. For future periods, Inogen is
unable to provide a reconciliation of non-GAAP measures without
unreasonable effort as a result of the uncertainty regarding, and the
potential variability of, the amounts of interest income, interest
expense, depreciation and amortization, stock-based compensation,
provisions for income taxes, and certain other infrequently occurring
items, such as acquisition related costs, that may be incurred in the
future.

Consolidated Balance Sheets

(amounts in thousands)

December 31,

2018

2017

Assets

Current assets

Cash and cash equivalents

$

196,634

$

142,953

Marketable securities

43,715

30,991

Accounts receivable, net

37,041

31,444

Inventories, net

27,071

18,842

Deferred cost of revenue

359

361

Income tax receivable

2,655

1,313

Prepaid expenses and other current assets

7,108

2,584

Total current assets

314,583

228,488

Property and equipment, net

22,341

20,103

Goodwill

2,257

2,363

Intangible assets, net

3,755

4,717

Deferred tax asset - noncurrent

30,130

18,636

Other assets

2,832

765

Total assets

$

375,898

$

275,072

Liabilities and stockholders' equity

Current liabilities

Accounts payable and accrued expenses

$

26,786

$

20,626

Accrued payroll

11,407

6,877

Warranty reserve - current

3,549

2,505

Deferred revenue - current

4,451

3,533

Income tax payable

392

345

Total current liabilities

46,585

33,886

Warranty reserve - noncurrent

5,981

3,666

Deferred revenue - noncurrent

11,844

9,402

Deferred tax liability - noncurrent

232

348

Other noncurrent liabilities

832

729

Total liabilities

65,474

48,031

Stockholders' equity

Common stock

22

21

Additional paid-in capital

249,194

218,109

Retained earnings

60,484

8,639

Accumulated other comprehensive income

724

272

Total stockholders' equity

310,424

227,041

Total liabilities and stockholders' equity

$

375,898

$

275,072

Consolidated Statements of Comprehensive Income

(unaudited)

(amounts in thousands, except share and per share amounts)

Three months ended

Twelve months ended

December 31,

December 31,

2018

2017

2018

2017

Revenue

Sales revenue

$

80,732

$

58,351

$

336,015

$

225,492

Rental revenue

5,799

5,436

22,096

23,946

Total revenue

86,531

63,787

358,111

249,438

Cost of revenue

Cost of sales revenue

39,263

28,856

163,989

110,163

Cost of rental revenue, including depreciation of $1,747 and $2,258

for the three months ended and $7,567 and $9,835 for the twelve

months ended, respectively

3,698

4,175

15,542

18,038

Total cost of revenue

42,961

33,031

179,531

128,201

Gross profit

43,570

30,756

178,580

121,237

Operating expense

Research and development

1,742

1,369

7,029

5,313

Sales and marketing

28,265

15,189

95,641

50,758

General and administrative

8,788

9,008

38,018

37,576

Total operating expense

38,795

25,566

140,688

93,647

Income from operations

4,775

5,190

37,892

27,590

Other income (expense)

Interest income

1,148

297

3,259

765

Other income (expense)

(100

)

307

(696

)

1,301

Total other income, net

1,048

604

2,563

2,066

Income before provision (benefit) for income taxes

5,823

5,794

40,455

29,656

Provision (benefit) for income taxes

(4,222

)

6,400

(11,390

)

8,654

Net income (loss)

$

10,045

$

(606

)

$

51,845

$

21,002

Other comprehensive income (loss), net of tax

Change in foreign currency translation adjustment

(106

)

51

31

363

Change in net unrealized gains (losses) on foreign currency hedging

404

(125

)

981

(567

)

Less: reclassification adjustment for net (gains) losses included in
net income

Basic net income (loss) per share attributable to common
stockholders (1)

$

0.47

$

(0.03

)

$

2.44

$

1.02

Diluted net income (loss) per share attributable to common
stockholders (1)

$

0.44

$

(0.03

)

$

2.30

$

0.96

Weighted-average number of shares used in calculating net income

(loss) per share attributable to common stockholders:

Basic common shares

21,544,202

20,869,589

21,266,696

20,683,807

Diluted common shares

22,600,038

22,167,358

22,514,513

21,897,988

(1) Reconciliations of net income attributable to common
stockholders basic and diluted can be found in Inogen’s Annual Report on
Form 10-K to be filed with the Securities and Exchange Commission.

Supplemental Financial Information

(unaudited)

(in thousands, except units and patients)

Three months ended

Twelve months ended

December 31,

December 31,

2018

2017

2018

2017

Revenue by region and category

Business-to-business domestic sales

$

25,359

$

21,856

$

116,581

$

83,390

Business-to-business international sales

18,526

11,991

77,333

55,519

Direct-to-consumer domestic sales

36,847

24,504

142,101

86,583

Direct-to-consumer domestic rentals

5,799

5,436

22,096

23,946

Total revenue

$

86,531

$

63,787

$

358,111

$

249,438

Additional financial measures

Units sold

46,100

34,000

198,600

128,000

Net rental patients as of period-end

26,900

30,700

26,900

30,700

Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures

(unaudited)

(in thousands)

Three months ended

Twelve months ended

December 31,

December 31,

Non-GAAP EBITDA and Adjusted EBITDA

2018

2017

2018

2017

Net income (loss)

$

10,045

$

(606

)

$

51,845

$

21,002

Non-GAAP adjustments:

Interest income

(1,148

)

(297

)

(3,259

)

(765

)

Provision (benefit) for income taxes

(4,222

)

6,400

(11,390

)

8,654

Depreciation and amortization

2,774

3,045

11,295

12,302

EBITDA (non-GAAP)

7,449

8,542

48,491

41,193

Stock-based compensation

3,007

3,010

12,790

9,640

Adjusted EBITDA (non-GAAP)

$

10,456

$

11,552

$

61,281

$

50,833

Three months ended

Twelve months ended

December 31,

December 31,

Non-GAAP net income

2018

2017

2018

2017

Net income (loss)

$

10,045

$

(606

)

$

51,845

$

21,002

Non-GAAP adjustments:

2017 U.S. tax reform(1)

—

7,578

—

7,578

Non-GAAP net income

$

10,045

$

6,972

$

51,845

$

28,580

Three months ended

Twelve months ended

December 31,

December 31,

Non-GAAP provision (benefit) for income taxes and effective tax
rate

2018

2017

2018

2017

Income before provision (benefit) for income taxes

$

5,823

$

5,794

$

40,455

$

29,656

Provision (benefit) for income taxes

(4,222

)

6,400

(11,390

)

8,654

Effective tax rate

-72.5

%

110.5

%

-28.2

%

29.2

%

Provision (benefit) for income taxes

$

(4,222

)

$

6,400

$

(11,390

)

$

8,654

Non-GAAP adjustments:

Excess tax benefits from stock-based compensation

6,002

3,495

21,227

9,936

2017 U.S. tax reform (1)

—

(7,578

)

—

(7,578

)

Provision for income taxes (non-GAAP)

$

1,780

$

2,317

$

9,837

$

11,012

Income before provision for income taxes

$

5,823

$

5,794

$

40,455

$

29,656

Provision for income taxes (non-GAAP)

1,780

2,317

9,837

11,012

Effective tax rate (non-GAAP)

30.6

%

40.0

%

24.3

%

37.1

%

(1) On December 22, 2017, the TCJA was enacted into law, which
significantly changed existing U.S. tax law and included numerous
provisions that impact our financial results. During the fourth quarter
of 2017, the Company recorded an estimated one-time net charge due to
the impact of changes in the tax rate, primarily on deferred tax assets.
There were no related charges during the fourth quarter or the twelve
months of 2018.

Company

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